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In praise of a mortgage and adieu

WEDNESDAY was a day that my fellow empty nester and I will remember.

We celebrated our wedding anniversary, but not in our usual low-key way.

We walked across town together and paid off our death contract.

That, according to an online history, is the literal meaning of the word "mortgage."

Business writer Gareth Marples says on a website called thehistoryof.net that "mort" is from the Latin word for death and "gage" means a pledge to forfeit something of value if a debt is not repaid.

We always knew we stood to forfeit if we didn't come up with those payments month after month, year after year. We just didn't think of it as a life-or-death deal.   

Closings, those meetings where you sign your name several hundred times and walk away with a set of keys and a fat payment book, are scary enough already.

Now that we can feed our book through the shedder, I realize our "death contract" actually led us to a better life.

It let us raise our family in space that met our needs long before we had the cash to pay for it.

That's not to say it was a great financial investment.

When we were looking for our first house, a real estate agent handed us a computer analysis showing how the value of our purchase would rise over time.

She was not happy when I calculated what we would end up with if we simply saved and invested the payment money. After 30 years, we would have tucked away far more than the house she was pushing would be worth.

Still, we eventually bought a house, realizing it was a lifestyle choice.

It turned out my husband was pretty good at cleaning gutters and caulking bathtubs. I lacked such skills but proved adept at spotting problems and pointing them out. It takes two.

One night I heard a sound and awoke him. "It sounds like drops of water hitting a metal surface," I said of the steady ping, ping, ping.

That's exactly what it was. A valve on a toilet had failed.

The small bathroom floor had filled with water, which now was dripping through some unsealed spot and hitting the hidden metal ductwork. Then the water was landing on the drywall ceiling below, resulting in both a stain and a crack.

Oh, the memories.    

We shivered when the furnace quit and sweated when the Freon wafted into the neighborhood. If you know what a thermocouple is, you might be a homeowner.

We have replaced the gas line, the sewer line, even the power line. Again spontaneously, the wire from the pole on the street pulled away from the house one day in spectacular fashion.

It snapped, crackled and popped, producing first flames and then a black line across the front yard.   

We have been old-fashioned homeowners in that we started by saving money for a down payment.

Two times we chose houses within our means, and we stayed in jobs that let us make those payments. We did our best to take care of our mostly bank-owned castles.

When the mortgage crisis hit a few years ago, it became clear that playing by old-fashioned rules had kept us out of trouble. Living in the state of West Virginia, where values never soared into the stratosphere of make-believe, also was a blessing.

The hard truth about mortgages is that not everybody is suited for one.

If you can't save for a down payment, you might not be up to the monthly obligation or the inevitable plumbing disaster. If little of your hard-earned money is at stake, you might not bother with the maintenance needed to preserve the home's value.

Now our country's policy makers are debating mortgage rules again. The Obama administration is pushing to make home loans available to more people.

Critics, including lenders, are leery. They took a great deal of heat for the recent housing crisis.

The notion that owning a home is part of the American dream can be a dangerous concept in the wrong hands. It can be a nightmare, not a dream, if people reach too far, too soon and find themselves "underwater."  

That means you owe more than the home is worth, more than you could sell it for.

You can walk away and say goodbye to your credit rating, negatively affecting many more aspects of your life, or you can remain in the home in a form of indentured servitude.

Although my husband and I never owed more than our house was worth, perhaps we have been slaves to those payments for the last few decades. We certainly paid far more than the asking price after interest was tacked on.

But we're thankful for a happy ending to our "death contract."

Ever the big spenders, we left the bank and celebrated with a fancy coffee for me and a smoothie for him. The cost was about six bucks, far less than a mortgage payment.  

 

Friend is editor and publisher of The Daily Mail. She may be reached at 348-5124 or nanyaf@

dailymail.com.

 


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